Two Brazilian companies announced Monday they’d reached a deal to buy Charlotte, N.C.-based Chiquita Brands International for $14.50 a share.
The acquisition ends months of corporate wrangling. Chiquita had tried to fend off the Brazilians and instead merge with an Irish produce company, Fyffes. But shareholders voted down the Fyffes deal Friday, leaving Chiquita little choice but to agree to the rival takeover offer.
Cutrale, an orange-juice maker, and Safra Group, a banking conglomerate, will pay about $680 million in cash for Chiquita. The deal is valued at $1.3 billion if Chiquita’s debt is included.
The companies said that after the acquisition, which is expected to close by the end of the year or in early 2015, Chiquita will be a wholly owned subsidiary of Cutrale and Safra. The company will retain its New Jersey incorporation, but Cutrale and Safra have not said what they plan to do with the company’s Charlotte headquarters.
Chiquita moved its headquarters to Charlotte from Cincinnati under a 2011 deal that gave the company $22 million in state and local incentives.
The agreement with the city of Charlotte and the local county government says that if Chiquita moves its global headquarters from Charlotte within 10 years, it must repay the incentives it has received. This spring, as he pursued the Fyffes deal, Chiquita CEO Ed Lonergan left open the possibility that the company would repay some of the incentives if the headquarters moved to Ireland as then planned.
The city and county have so far paid Chiquita at least $510,000 each, for a total of more than $1 million. They are scheduled to pay the fruit company about $1.5 million in future grants in coming years.
“I don’t yet know what it means,” Michael Barnes, head of the Charlotte City Council’s economic-development subcommittee, said of the Brazilian deal. “I hope the new company will retain the jobs and its presence in Charlotte. There were clawbacks in the agreement, and if we need to exercise them, we will do that.”
Officials representing Chiquita and the Brazilian firms said Monday that they are still working through the details of the transaction and won’t have an immediate comment about the headquarters.
Chiquita spokesman Ed Loyd said the company “will be working over the next months to ensure a smooth execution, and will be continuing to communicate and work with local officials as more details become available.”
He added that Chiquita and the Brazilian firms “are in complementary businesses,” and the Brazilians are confident that Chiquita can grow its business “and benefit its stakeholders, including employees, business partners, customers, distributors and suppliers.”
Cutrale-Safra said in a statement that it has “substantial experience in all aspects of the fruit and juice value chain and extensive financial expertise,” and looks forward to helping Chiquita grow.
“We recognize that Chiquita’s strengths include a highly talented and engaged team of employees in Charlotte,” Madisen Obiedo, a New York-based spokeswoman for Cutrale-Safra, said in a statement. “Beyond that we are not in a position to comment – our immediate focus is on closing the transaction.”
In addition to Brazil, Cutrale has extensive operations in Florida, where the company operates frozen concentrated orange-juice plants, and Safra has bank and real-estate holdings in New York.
“We are pleased with the substantial value and significant all-cash premium we have delivered through this exciting agreement with the Cutrale Group and the Safra Group. Through the due diligence process, we developed a tremendous amount of respect for the entire Cutrale-Safra team,” said Chiquita’s Lonergan, who had championed the Fyffes deal, in a statement Monday.
The state is providing the bulk of Chiquita’s incentive package – more than $16 million, equal to an estimated 75 percent of the company’s state income-tax withholding for the new jobs. That money is set to be paid over 11 years. The state also agreed to give Chiquita $2.5 million to match the city and county money.